After winning the election on September 25, the party leader Brothers of Italy, Georgia Meloni, is called upon to start forming a government in a difficult period for the economy.

With a fragmented opposition, analysts predict Meloni will be able to stay in power longer than previous short-lived governments. But it will probably not be an easy task. Here are the seven main challenges he will face.

Difficult economic climate

Meloni comes to power at a time when the Italian economy is slowing down. Due to soaring energy prices, growth rates in 2023 are projected to be lower than expected, making managing the high public debt (145.4% of GDP) even more difficult. Meloni also has to deal with rising inflation and rising interest rates.

He has promised to cut taxes to spur growth, but a possible widening deficit could pose serious problems for him. “If Meloni deviates from the trajectory set by Draghi, the government will face a sharp negative reaction from the markets,” said economist Guido Tabellini.

Budget

At the tip of the iceberg is the 2023 budget. When the new government takes office, likely in early November, it will need to send the draft budget to Brussels for approval, but there is limited room for maneuver. Meloni will need several billion euros to cushion the impact of higher energy prices, which are expected to create obstacles to the fulfillment of her campaign promises, such as a freeze on raising the retirement age. This could cause tension in the coalition.

recovery plan

Italy needs money from Brussels. The new government has until December to meet 55 targets set by the European Commission to secure the next tranche of the European Recovery Plan of 750 billion euros.

Meloni’s campaign statements to revise the recovery plan raised alarm. His opponents argued that it could jeopardize vital assets, and even Silvio Berlusconi called the proposal “absurd and dangerous”. Meloni retreated, but again raised the need to “revise” the plan because of the rising cost of raw materials.

Her allies

Meloni is asked to work with the politicians she defeated in the elections. His allies take different positions on many issues, such as regional autonomy and pensions. In addition, the leader of the Italian faction “Adelphia” calls for a “sea blockade” of immigrants from Africa, and Matteo Salvini wants to continue cutting humanitarian programs.

Ministerial

Meloni planned to bring sociologists into the cabinet before the election and recruit candidates such as prosecutor Carlo Nordio. However, her allies will put pressure on her, counting on key positions in ministries in exchange for their support.

Matteo Salvini, leader of the League, wants to return to the Interior Ministry, from where he can support his anti-immigration agenda.

Berlusconi wants his party to play an important role in the government, claiming to be the guarantor of Italy’s pro-European line. The war in Ukraine complicates matters for Meloni, who wants to avoid appointing pro-Russian ministers.

Sanctions against Russia

Meloni vowed to stay on the side of NATO and the EU on sanctions against Russia and told Ukrainian President Volodymyr Zelensky that she could count on her support. But Salvini says the sanctions hurt Italy more than Russia, and polls show voters agree.

Europe

While the leaders of Hungary and Poland welcomed Meloni’s election, Paris and Berlin did not share the same enthusiasm. During the election campaign, Meloni said that “the party is over” for the EU, as Italy would vigorously defend its interests.

French President Emmanuel Macron wants to be on good terms with Rome because of their shared interest in reforming EU fiscal rules. Adelphia MEP Nicola Procaccini told POLITICO: “It’s important that Italy plays its game.”

According to Politico